Posts from Tuesday Apr 16 2013

FT markets round-up: “Gold, equities and industrial metals attempted a fightback following the previous session’s sharp sell-off but met with varying degrees of success as lingering uncertainty about the outlook for global growth kept market bulls reined in. A rally for gold showed signs of fatigue during the US session, and the yellow metal was up just 1.5 per cent at $1,373 an ounce in late New York trade – having earlier nosed back above $1,400. In the prior two sessions, gold had suffered its sharpest drop in 30 years, catching many investors by surprise.” (Financial Times) Read more

This is a guest post by Jean-François Groff, the CEO of Mobino, a Geneva-based mobile payments company. He is also one of the Web’s pioneers, having contributed to the definition of HTTP and HTML with Tim Berners-Lee at CERN.

Financial inclusion is undoubtedly a hot topic. As digital wireless infrastructure covers the globe, a host of mobile money providers have sprung into action to provide unbanked citizens with convenient ways to move money, turning phones into wallets. But the money in these digital wallets is not really equivalent to cash. The convenience of mobile money comes at a cost, both to the state and to its citizens. Read more

Mike Konczal has the post of the day summarising a new paper by economists Thomas Herndon, Michael Ash, and Robert Pollin — they find flaws in the methodology used by Reinhart and Rogoff, in their controversial paper on the relationship between high debt levels and economic growth.

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

Still, we missed this slapdown by the ECB… directed at Spanish plans for the deposit guarantee fund there to buy out retail investors from illiquid preferred shares and subordinated debt in unlisted banks, when those banks are being restructured. Read more

Robert Campbell at Reuters is worried about refining margins. He thinks too many countries are becoming net exporters of refined oil products or intend to become exporters. That leaves few takers for surplus refined products in the world.

All of which leaves a lot of refining capacity vulnerable to closure in the next year or so. Read more

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

Beat: Bulls are okay with this. Bears say it’s unsustainable, usually because of inflationary risks, policy tightening risks, credit risks, or the imbalances. FT AV commenters say the numbers are made up anyway.

Miss: Bears are okay with. Bulls say not to worry as it means more stimulus/loosening will happen. FT AV commenters say the numbers are made up anyway. Read more

Some deep thoughts from Goldman Sachs, by way of Jeffrey Currie and team, on the drivers of the current commodity sell-off (and no, their short gold advice from last week isn’t listed as one of them):

The sharp sell-off in gold was triggered by growing fears that the central bank of Cyprus would sell its gold reserves, potentially reflecting a larger monetization of gold reserves across other European central banks. The decline in prices was exacerbated by the breach of key technical price support level at $1,530/toz and then at the $1,434/toz 200-week moving average, creating the largest one day decline. Spillover from gold and renewed European and EM macroeconomic concerns also created sharp sell-offs in crude oil and base metals, that were mostly front-end driven, crushing spreads (the carry), as longer-dated prices remained remarkably stable.

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

Australia’s currency has become a different kind of creature in the past few years, moving from being mostly a commodity play to more of a safe haven. This has been something of a double-edged sword for the country’s monetary policymakers: it helped avoid a big inflationary spike as the mining investment boom was booming; but now that wave is close to peaking, the burdens of having a premium currency are becoming harder to bear. Read more

Lisa joined FT Alphaville in September 2011 after a tour of duty through the guts of the financial industry, having worked as an analyst at a bank and for a financial data company. She's now the Head of New Projects for FT.com.

Lisa joined FT Alphaville in September 2011 after a tour of duty through the guts of the financial industry, having worked as an analyst at a bank and for a financial data company. She's now the Head of New Projects for FT.com.

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.